Uber has been trying to prove that it’s more than just a ride-hailing business, but it’s fledgling food delivery service has already hit a road bump in New York City.
In a letter sent to UberEATS customers, the company announced it was shutting down what it called instant delivery. The company only offered two pre-fixed dishes, like a sandwich or salad from a restaurant, and would promise to deliver it under 10 minutes.
The instant ordering allowed restaurants to make sandwiches and salads in bulk for an Uber driver to carry around in their car, trying to maximise efficiency.
While Uber is dropping the instant delivery service in New York, it will continue to offer its standard food delivery service, which includes an expanded menu, in the city.
Uber recently spun out UberEATS into its own standalone app that combined both its instant lunch option with a full menu of hundreds of restaurants. In addition to offering the pre-fixed list of sandwiches or salads, the company opened its delivery force to start picking up individual orders from restaurants, like Seamless or GrubHub do.
When the new app launched last month in New York City, the instant option was as heavily advertised as the new expanded list of restaurants for customers.
Yet, Monday’s letter shows that promising fast delivery times wasn’t a sustainable operation for the ride-hailing giant. An Uber spokeswoman confirmed to Quartz, which first wrote about the letter, that the instant option was being phased out in New York City only.
The news that Uber is backing out of instant delivery in the New York city market could spell trouble for Uber, or represent a broader sign of trouble for startups trying to compete in the food delivery space.
If Uber couldn’t make the logistics work, it could be a sign of trouble for a company wanting to pitch itself as the future of transportation. Or, it could be a sign to the other businesses in the crowded food delivery market that there isn’t a good business to be made trying to be the fastest and cheapest option out there.
Uber, though, claims that its food delivery business is growing, despite phasing out the limited lunch menu in New York city.
“Since launching the standalone UberEATS app under a month ago, we’ve seen an incredible response and have more than doubled the numbers of users. The app has allowed restaurants across Manhattan to expand their reach and customer base. With these small updates, we can ensure we are providing the best experience for customers, restaurant owners, and couriers alike,” said Michael Conti, General Manager of UberEVERYTHING NYC.